What is domain cloaking?
Domain cloaking is a process through which the domain name on the address bar remains the same even though the location of the domain may change. It is also known as domain masking and it is normally used by companies that would like to change their hosting service but would not like the users of the domain to know. As such, what happens is when the user types in the address in question he or she is re-directed seamlessly to the new location. As such, the name on the address bar would not change despite the fact that the domain is now hosted in a different location. The advantage of this system is usually cosmetic for the most part.
While talking about this, it is important to point out that some of the search engines may not really understand the frames that have been set and therefore may not index the content. In the same vein, there are some sites that will understand the frames and index the content in a way that will ensure the users are not affected.
Domain cloaking is a common practice amongst corporate clients who would not like to disrupt the way that their clients usually access the net. It can also be used by those who run two different domains for the same website. By domain cloaking, these individuals are able to avoid duplication of material and penalties from search engines that may arise as a result of that.